The Spanish video game production industry continues to grow although with extreme fragmentation

Billing grew by 15.6%, reaching 713 million euros in 2017. Employment added 6,337 professionals in 2017, growing by 16.5%.

The Spanish video game production sector had a turnover of 713 million euros in 2017, 15.6% more than 2016, and increased its workforce by 16.5%, reaching 6,337 professionals, as revealed by the White Paper on Spanish video game development in its 2018 edition, which was presented this Wednesday in Madrid by the Spanish Association of Producers and Developers of Video Games and Entertainment Software (DEV) with the support of ICEX Spain Export and Investment.

The presentation included participation in the opening ceremony of Reyes Maroto, Minister of Industry, Commerce and Tourism, and Minister of Culture, José Guirao.

The White Paper, which this year celebrates its fifth edition, is aimed at development studios, current and future professionals, public entities and, also, national and international private investors, as well as society in general. being an unbeatable tool to gain an in-depth understanding of the video game industry and market in Spain and to gather all possible information for decision-making and the development of investment plans and public support for the coming years.

Company profile

The Spanish census of legally established and incorporated companies that are dedicated to the development and production of video games amounts to 455.

He 81% of active companies were created in the last 10 years. After strong growth experienced just over five years ago, the number of companies dedicated to the development and production of video games in Spain had resized in 2017 and then stabilized in the following year.

Despite this stagnation in the total number of companies, there is still great potential for growth, with around 160 projects having been registered waiting to be established as a legal entity.

The great increase in the number of companies during the last decade has not, however, gone hand in hand with a consolidation that has allowed their sustainable growth. The result is an extremely polarized business fabric, made up of a broad base of microbusinesses. 88% of companies have a turnover of less than 2 million euros and 74% employ less than 10 people.

Most of the companies are concentrated in four autonomous communities: Catalonia, Madrid, Valencian Community and Andalusia.

The video game production industry is highly exporting, since 67% of revenue comes from international markets, 10% more compared to 2016. In particular, the weight of the North American and Asian markets grew by 4% in 2017 for both regions, which is a positive fact considering that they are the main world markets.

Billing and employment

The Spanish video game production sector In 2017, it invoiced a total of 713 million euros, 15.6% more than 2016. Likewise, it increased its workforce in 2017 by 16.5%, reaching 6,337 professionals.

According to forecasts, turnover will grow at an annual rate of 23% (CAGR 2017-2021), which would mean reaching 1,630 million euros in turnover in 2021. In the same way, we can estimate employment growth at a compound annual rate (CAGR 2017-2021) of 18.2%, reaching 12,379 direct jobs in 2021.

However, this is growth that is largely due to large companies. Half of the sector's turnover corresponds to companies with a turnover of more than 50 million euros. Likewise, 59% of employment is made up of companies with
a staff of more than 50 employees.

On the other hand, microenterprises that invoice less than 2 million euros and employ fewer than 10 people together account for only 8% of turnover and 7% of employment.

Business models

81% of companies develop their own intellectual property. On the other hand, 42% develop commissioned video games and 20% publish their games or third-party games. 21% also carry out training activities, on their own or in collaboration with training centers. A
out of every four companies develops serious games.

Digital business models are those that generate the most turnover on average for Spanish video game companies: firstly, digital sales, followed by free to play business models with monetization through advertising or in-game purchases. On-demand video games, on average, already represent a quarter of the sector's income.

Platforms and tools

The platform most used by Spanish companies and studios continues to be the computer (PC and Mac), which has increased its presence in recent years. Mobile devices follow (Android above iOS), although their use is decreasing significantly. On the other hand, Playstation 4, Nintendo Switch and Xbox One consoles are being used more every year and could surpass mobile devices next year. In particular, the Nintendo console has seen its use double by Spanish companies in the last year.

It is noteworthy that almost all platforms virtual reality have seen their use decrease with respect to the previous year. Only Oculus Rift and Microsoft Hololens have increased their presence in the productions of Spanish companies.

The great challenges that virtual reality presents mean that its implementation in Spanish games has decreased significantly in the last year, along with, to a lesser extent, Augmented Reality. Mixed Reality, however, is the segment that is growing the most, driven by the expectations generated by platforms such as Microsoft Hololens and Magic Leap. On the other hand, the adoption of eSports-based models remains stable.

Unity is the leading game engine on the market in Spain, since 85% of companies use it. Unreal follows at a long distance, with 23%. The fact that one company out of ten uses its own engines stands out, which highlights the investments in R&D&I in the sector.

Access to the White Paper on Spanish video game development.

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